SYT Syngenta Ag (delisted)

By Jacob Bunge 

U.S. lawmakers say they plan to hold a hearing to examine a wave of mergers that could reshape the $100 billion global market for seeds and pesticides.

Sen. Charles Grassley (R., Iowa), chairman of the Senate Judiciary Committee, said multibillion-dollar deals between some of the agriculture sector's biggest players could reduce competition and lead to higher prices for farmers at a time when farm income is projected to hit its lowest level in more than a decade.

"In most instances when you have less competition, prices go up, and consumers pay more," Mr. Grassley said in an interview. "In the case of agriculture, farmers are both consumers of [seeds and chemicals], as well as marketers of products."

The plan comes a day after China National Chemical Corp. said its planned $43 billion takeover of Syngenta AG was cleared by the Committee on Foreign Investment in the U.S., or CFIUS, which evaluates deals involving foreign companies purchasing U.S. businesses. Syngenta, among the world's largest pesticide and seed manufacturers, generates about 25% of its sales in North America.

DuPont Co. and Dow Chemical Co., both of which maintain large seed and crop chemical divisions, are proceeding with their own merger plan that would combine their businesses and then split into three separate companies, including an enlarged agriculture firm.

German pharmaceutical giant Bayer AG, which also makes seeds and pesticides, since May has been pursuing a takeover of Monsanto Co., the world's largest supplier of crop seeds and genetics. Though Monsanto several times has rejected Bayer's proposals, the companies continue to discuss a deal.

Mr. Grassley said the September hearing will aim to ensure that antitrust enforcers at the U.S. Department of Justice and the Federal Trade Commission are properly vetting the proposed deals. The hearing will seek to include seed companies' "points of view," though he said it was too early to say who would appear, and the committee also will examine the proposed deals' potential effect on consumers.

Mr. Grassley, who has previously called for scrutiny of agricultural mergers, was among a group of lawmakers who earlier this year sought a deeper review of the ChemChina-Syngenta merger, raising concerns around food security.

Other lawmakers have raised similar concerns. Sen. Debbie Stabenow (D., Mich.) on Monday reiterated a call for the U.S. Department of Agriculture and the Food and Drug Administration to have a permanent role in reviewing foreign-driven acquisitions of U.S. assets.

"Food security and safety are critical to national security and must be taken into consideration during the CFIUS review process," she said.

--William Mauldin contributed to this article.

Write to Jacob Bunge at jacob.bunge@wsj.com

(END) Dow Jones Newswires

August 24, 2016 02:49 ET (06:49 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.